Government plans to overhaul financial regulation tested by early exit for FSA supremo Hector Sants
13:25 GMT, 16 March 2012
Government plans to overhaul financial regulation in the UK were dealt a blow today as the chief of the Financial Services Authority unexpectedly quit.
FSA chief executive Hector Sants had been expected to remain at the City watchdog to oversee its division into two separate bodies.
The former Credit Suisse broker was due to stay until next year and head up the Prudential
Regulation Authority (PRA), which will supervise banking from within the Bank of England.
As such he was also due to become a deputy governor of the Bank, but it appears he has additionally snubbed that position.
Stepping down: FSA chief executive Hector Sants will leave the watchdog at the end of June
Mr Sants, whose five years in charge saw the UK banking system go into meltdown, said he will quit at
the end of June – before the new system is up and running.
The Bank of England's Andrew Bailey will take over Mr Sants' FSA role.
The Chancellor must now choose someone else to run the PRA. Meanwhile, the second body, the Financial Conduct Authority (FCA), will be formed to
look after markets and consumer protection under a 'twin peaks' system.
Mr Sants had previously announced he
would quit in 2010 but was convinced to stay on.
He said: 'When I agreed to stay on as CEO in 2010, I committed to stay
and deliver an orderly transition to the Government's new regulatory
'The project is now firmly on track and with the establishment of twin peaks within the FSA I will have achieved that goal.
'Now is the right time to hand over to those who will deliver the long-term goals of the future PRA and FCA.'
The bodies that will become the PRA and the FCA are already in place and
the twin peaks system will start to come into practice next month.
Sir Mervyn King, governor of the Bank of England, said: 'I am sad that
Hector Sants has decided to stand down. I am very grateful to him for
staying on for longer than he had planned.'
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